Alex Pettee, CFA
Healthcare REITs: Vaccine Brings New Life
Healthcare REITs - particularly senior housing and long-term care facilities - have been "ground zero" of the ongoing coronavirus pandemic as the illness has devastated the world's elderly populations.
While the initial roll-out has been slow, the successful approval of coronavirus vaccines may have prevented a "lost decade" for senior housing REITs, which reported record-low occupancy rates in late-2020.
Government relief funds continue to pour into the healthcare sector, which has not only prevented catastrophe, but mid-pandemic fundamentals are also actually stronger for several healthcare REIT sub-sectors.
Selectivity is especially essential in the bifurcating healthcare REIT sector, but long-term fundamentals remain more compelling than other beaten-down REITs in the retail and office sectors.
Silver linings? Senior Housing remains the troubled spot, but external growth opportunities should be plentiful over the next half-decade for the most well-capitalized REITs amid the disruptions.
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